When we sit down inside EY and discuss what the most important risks are to the longer term of the blockchain industry, one topic that comes up again and again is that the high rate at which key blockchains are forking and therefore the possibility that future forks will split apart large blockchains with critical mass.
This is important because we don't believe that non-public blockchains will scale effectively beyond highly specific use cases into a general-purpose platform for digital contracting between enterprises. That job, if any system is to require it, will belong to public blockchains.
The more companies and users there are on one network, the more likely it's you'll transact together with your key business partners over a standard infrastructure.
But, if public blockchains splinter into many various camps, one among their key advantages over networks of personal blockchains will disappear.
Right now, however, forking a public blockchain is as easy as copy and paste, and it happens all the time as a way to “resolve” (I’m using that word during a very limited way) governance disputes.
This option won’t be viable for for much longer , however, as real-world assets represented by digital tokens start shooting up on public blockchains. Links between those assets – be they land , diamonds, gold or U.S. dollars in escrow accounts – and therefore the blockchain tokens will only be valid on the first network.
If they don’t already, the acquisition agreements for these tokens and assets will got to be quite specific about what constitutes the “primary” or “original” blockchain on which the token is found , and external firms involved in attestation and audit will need to comply with and meet up those plans.
The role of external firms are going to be particularly important going ahead. As blockchains are more and more linked to ownership of real-world assets, verifying the link to those assets goes to be important to investor confidence.
It will still be possible to fork blockchains, but the probabilities that users will come to alternative paths is declining by the day. Those users are going to be closely tied to their investment assets, which if they represent off-chain items, will have one and just one valid public blockchain representation.
As a result, it'll become more and more important for the main public blockchains to develop robust governance models that are ready to manage change and incorporate the views of stakeholders. it's also important for users to know that as blockchains mature, they're likely to become much less dynamic and alter less frequently.
It’s no accident that trustworthy institutions tend to evolve slowly and prize stability.